Doomsayers return to housing analysis

Posted: 22 Nov 2006 11:24:57 GMT

With the most recent property boom apparently about to begin fading away, the housing doomsayers have once again raised their voices above the optimists

With the most recent property boom apparently about to begin fading away, the housing doomsayers have once again raised their voices above the optimists.

Getting a prediction of imminent collapse in early is former Treasury economist David Miles, who has said that property prices will begin to fall sharply in the next few years.

This will be preceded by a slow tailing off of the recent boom, as willingness to invest has been founded on expectations that property prices would continue to rise rapidly.

"A sharp fall in real house prices is likely at some point in the relatively near future, though it could yet be one to two years away," said Mr Miles, reports the Daily Mail.

The warning that the UK property market is operating like a classical speculative bubble is contained in a report commissioned by Morgan Stanley.

Mr Miles estimated that as much as half of price growth since 1996 has been fuelled by speculation, while half has been built on real demand and supply issues.

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